During the Asian session, activity data from Australia will be released, as well as China’s Caixin Services PMI. The latest European PMIs and the Euro Zone Producer Price Index will also be published. Later, the Federal Reserve will publish the minutes of its last meeting.
Here’s what to know on Wednesday, July 5:
On a quiet US holiday day, the dollar had mixed results. Commodity currencies were the best performers. Markets are waiting for new information, and volatility will pick up on Wednesday with the release of the FOMC Minutes. ADP, JOLTS and jobless claims data will be released on Thursday, and non-farm payrolls on Friday.
The Dollar Index rose above 103.00, driven solely by the decline in EUR/USD, which fell below 1.0900. The Euro was the worst performing currency among the major pairs. On Wednesday the final reading of the PMIs for June in the Eurozone will be announced, as well as the Producer Price Index (PPI) for June.
GBP/USD rose slightly and held above 1.2700, while EUR/GBP resumed its slide, approaching 0.8550 and posting its lowest close in two weeks.
USD/JPY moved sideways around 144.50 in a tight range. The Yen benefited from a modest decline in European stocks and a modest decline in European bond yields.
AUD/USD rallied on Tuesday after the decline that followed the Reserve Bank of Australia’s (RBA) decision to keep rates unchanged. The pair bottomed at 0.6641 and then bounced, reaching levels above 0.6700. On Wednesday the AIG manufacturing index will be released, as well as the final Global PMI service.
TD Securities on the RBA:
We stand by our forecast for the RBA to hike rates in August. However, further hikes will be more data dependent and according to today’s statement an upside inflation surprise will be needed to get the RBA back on the hike table. At this point, the risk to our 4.85% forecast is that the tightening cycle lengthens rather than the RBA ending the rate hike.
The kiwi was one of the most bullish stocks, with AUD/NZD hitting a one-month low following the RBA decision, dipping below 1.0800. The NZD/USD pair It rose for the third day in a row and posted the strongest daily close in two weeks, slightly below 0.6200 and above the key daily simple moving averages.
USD/CAD fell on Tuesday but found support above 1.3200. Dollar weakness and the recovery in crude oil prices following production cuts in Saudi Arabia and Russia favored the CAD.
Metals rose modestly on Tuesday, with Gold testing levels above $1,930, but again failing to hold above and pulling back. The Silver is still limited by the $23.00 area.
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
